Monday, February 23, 2009

Shadow Treasurer Joe Hockey has opened an apparent division within the Opposition, describing the government's carbon emissions reductions target as "very low".

The proposed emissions trading scheme was condemned as recently as Friday by Shadow Attorney General George Brandis who said it would send jobs offshore.

The government has put forward a scheme designed to cut emissions by 5 per cent by 2020, and by up to 15 per cent depending on the outcome of the United Nations conference on climate change to be held in Copenhagen in December.

The scheme is due to go before the Senate in May.

Speaking on ABC TV Mr Hockey described the Opposition's position as detailed and comprehensive...
"We believe that global warming is occurring and we believe that human beings have contributed to it," he said.

"The question is how you get about doing something about it."

"And now that China is the biggest emitter in the world and yet made no commitment to Kyoto or subsequently, everything does depend on Copenhagen at the end of this year, and yet we've got an Australian Government that is in that grey twilight area of having a very low target but wanting to lead the world."

Greens Deputy Leader Christine Milne welcomed the Shadow Treasurer's observation that 5 per cent was "very low" but asked what higher target he had in mind.

"Playing politics with climate targets is a dangerous game. The Australian people are impressively informed. They will not be impressed by an Opposition trying on green clothing but with coal dust still all over its hands," she said.

“The fact that the Opposition is clearly in disarray over climate change is bad for Australia's democracy."

"It makes no sense that, while some key frontbenchers are calling the Government's emissions target weak, others are still bizarrely attacking one of the Government's few sensible climate policies – the roll-out of ceiling insulation across the country."

Treasurer Wayne Swan last week asked a parliamentary committee to inquire into the government's proposed emissions trading scheme and then asked it to cancel the inquiry because of what he called "unfortunate politicisation".

The turnaround created the impression that the government might delay or water down its scheme and disrupted Australian trading on the international carbon market.

Mr Swan said Sunday the government strongly supported the scheme and would proceed with it "enthusiastically," releasing an exposure draft of legislation within weeks.

Challenged about the Coalition's position Mr Hockey said "we don't know what we're voting for at the moment because there's no legislation."

"We found out from the governor of the Reserve Bank on Friday in Friday's committee hearings that there was a 20 per cent surge in the first half of last year in the number of Australians who fixed their home loan rates."

Mr ANTHONY SMITH — Governor, I have got a series of questions. If I could go back to the issue of fixed mortgages, what proportion of mortgages are fixed in Australia?

Mr Stevens — About one-fifth.

Mr ANTHONY SMITH — And the US is much higher, isn’t it?

Mr Stevens — Most of them.

Mr ANTHONY SMITH — And what was the magnitude of the increase last year in that context?

Mr Stevens—The increase of what?

Mr ANTHONY SMITH — Fixed mortgages. I think you said —

Mr Stevens — For the flow of new mortgages the share rose by how much, Malcolm?

Dr Edey — It is normally about 10 per cent or a bit higher. It went up to over 20 per cent for a while early last year.

Mr ANTHONY SMITH — And what was the level before then?

Mr Stevens — Of the total stock outstanding—I cannot quote the figures as I do not have them in my head—it would have raised it a bit, though, the monthly flow is of course not that big compared to the total stock that is out there so —

Mr ANTHONY SMITH — How would that compare with previous cycles?

Mr Stevens — I am not really sure; I have not done the sums. It usually happens that when interest rates rise, and some people expect they may rise further, the share of fixed rate loans goes up, though that hinges of course on the pricing because the pricing has got embodied in it a set of expectations about the future path of interest rates.

I read the Governor as saying that there was a doubling in the share of new mortgages that were fixed. That's rather more than a 20 per cent surge.